Showing 784–792 of 1959 results

  • CHAPTER 2 MINI CASE: Barney Smith Inc.

    $7.00

    SITUATION

    Assume that you recently graduated with a major in finance, and you just landed a job as a financial planner with Barney Smith Inc., a large financial services corporation.  Your first assignment is to invest $100,000 for a client.  Because the funds are to be invested in a business at the end of 1 year,  you have been instructed to plan for a 1 year holding period.  Further, your boss has restricted you to the following investment alternatives shown with their probabilities and associtated outcomes. Barney Smith’s economic forecasting staff has developed estimates for the state of the economy and its security analyst have developed a sophisticated computer program which was used to estimate the rate of return on  each state of the economy.  Alta Industries is an electronics firm; Repo Men collects past due debts; and American Foam manufactures mattresses and various foam products.  Barney Smith also maintains an “index fund” which owns a market-weighted fraction of all publicly traded stocks; you can invest in that fund, and thus obtain average stock market results.  Given the situation as described, answer the following questions.

    Return on Investment

    What is the return on an investment that costs $1,000 and is sold a year later for $1,100?

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  • Problem Set 2 International Finance – SUGGESTED SOLUTIONS TO CHAPTER 4 PROBLEMS

    $15.00
    1. From base price levels of 100 in 1987, West German and U.S. price levels in 1988 stood at 102 and 106, respectively. If the 1987 $/DM exchange rate was $0.54, what should the exchange rate be in 1988? In fact, the exchange rate in 1988 was DM 1 = $0.56. What might account for the discrepancy? (Price levels were measured using the consumer price index.)
    2. In early 1996, the short-term interest rate in France was 3.7%, and forecast French inflation was 1.8%. At the same time, the short-term German interest rate was 2.6% and forecast German inflation was 1.6%.
      • Based on these figures, what were the real interest rates in France and Germany?
      • To what would you attribute any discrepancy in real rates between France and Germany?
    1. In July, the one‑year interest rate is 12% on British pounds and 9% on U.S. dollars.
      • If the current exchange rate is $1.63:,1, what is the expected future exchange rate in one year?
      • Suppose a change in expectations regarding future U.S. inflation causes the expected future spot rate to decline to $1.52:£1. What should happen to the U.S. interest rate?
    1. If expected inflation is 100% and the real required return is 5%, what will the nominal interest rate be according to the Fisher effect?
    1. Suppose that in Japan the interest rate is 8% and inflation is expected to be 3%. Meanwhile, the expected inflation rate in France is 12%, and the English interest rate is 14%. To the nearest whole number, what is the best estimate of the one‑year forward exchange premium (discount) at which the pound will be selling relative to the French franc?
    2. The inflation rate in Great Britain is expected to be 4% per year, and the inflation rate in Switzerland is expected to be 6% per year. If the current spot rate is £1 = SF 12.50, what is the expected spot rate in two years?
    3. If the $:¥ spot rate is $1 = ¥218 and interest rates in Tokyo and New York are 6% and 12%, respectively, what is the expected $:¥ exchange rate one year hence?
    4. Suppose that on January 1, the cost of borrowing French francs for the year is 18%. During the year, U.S. inflation is 5%, and French inflation is 9%. At the same time, the exchange rate changes from FF 1 = $0.15 on January 1 to FF 1 = $0.10 on December 31. What was the real U.S. dollar cost of borrowing francs for the year?
    5. Assume the interest rate is 16% on pounds sterling and 7% on the Euro. At the same time, inflation is running at an annual rate of 3% in Germany and 9% in England.
      1. If the Euro is selling at a one-year forward premium of 10% against the pound, is there an arbitrage opportunity? Explain.
      2. What is the real interest rate in Germany? in England?
      3. Suppose that during the year the exchange rate changes from Euro2.7/£1 to Euro2.65/£1. What are the real costs to a German company of borrowing pounds? Contrast this cost to its real cost of borrowing Euro.
      4. What are the real costs to a British firm of borrowing Euro? Contrast this cost to its real cost of borrowing pounds.
    1. Suppose today’s exchange rate is $0.62/Euro. The 6-month interest rates on dollars and Euro are 6% and 3%, respectively. The 6-month forward rate is $0.6185. A foreign exchange advisory service has predicted that the Euro will appreciate to $0.64 within six months.
      1. How would you use forward contracts to profit in the above situation?
      2. How would you use money market instruments (borrowing and lending) to profit?
      3. Which alternatives (forward contracts or money market instruments) would you prefer? Why?

    Chapter 11(a) problems 

    1. On January 1, the U.S. dollar:Japanese yen exchange rate is $1 = ¥250. During the year, U.S. inflation is 4% and Japanese inflation is 2%. On December 31, the exchange rate is $1 = ¥235. What are the likely competitive effects of this exchange rate change on Caterpillar Tractor, the American earth‑moving manufacturer, whose toughest competitor is Japan’s Komatsu?
    2. In 1990, General Electric acquired Tungsram Ltd., a Hungarian light bulb manufacturer. Hungary’s inflation rate was 28% in 1990 and 35% in 1991, while the forint (Hungary’s currency) was devalued 5% and 15%, respectively, during those years. Corresponding inflation for the U.S. was 6.1% in 1990 and 3.1% in 1991.
      1. What has happened to the competitiveness of GE’s Hungarian operations during 1990 and 1991? Explain.
      2. In early 1992, GE announced that it would cut back its capital investment in Tungsram. What might have been the purpose of GE’s publicly announced cutback?
      3. Assess the likely consequences of a declining dollar on Fluor Corporation, the international construction‑ engineering contractor based in Irvine, California. Most of Fluor’s value‑added involves project design and management; most of its costs are for U.S. labor in design, engineering, and construction‑management services.
    1. The Edmonton Oilers (Canada) of the National Hockey League are two‑time defending Stanley Cup champions. (The Stanley Cup playoff is hockey’s equivalent of football’s Super Bowl or baseball’s World Series.) As is true of all NHL teams, most of the Oilers’ players are Canadian. How are the Oilers affected by changes in the Canadian dollar/U.S. dollar exchange rate?
    2. South Korean companies such as Goldstar, Samsung, and Daewoo have captured more than 10% of the U.S. color TV market with their small, low‑priced TV sets. They are also becoming more significant exporters of videocassette recorders and small microwave ovens. What currency risk do these firms face?
    3. Black & Decker Manufacturing Co. of Towson, Maryland, has roughly 45% of its assets and 40% of its sales overseas. How does a soaring dollar affect its profitability, both at home and abroad?
    4. The shipbuilding industry is facing a worldwide capacity surplus. Although Japan currently controls about 50% of the world market, it is facing severe competition from the South Koreans. Japanese shipyards are extraordinarily productive, but at current price levels were just about breaking even with an exchange rate of ¥240 = $1. What are the likely effects on Japanese shipbuilders of a yen appreciation to ¥180 = $1? The South Korean won has maintained its dollar value.

    Chapter 11(b) problems 

    1. Gizmo, U.S.A. is investigating medium‑term financing of $10 million in order to build an addition to its factory in Toledo, Ohio. Gizmo’s bank has suggested the following alternatives:
    Type of loan Rate
    3-year U.S. dollar loan

    3-year Euro loan

    3-year Swiss franc loan

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    8

    4
    • 1. What information does Gizmo require to decide among the three alternatives?
    • 2. Suppose the factory will be built in Geneva, Switzerland, rather than Toledo. How does this affect your answer in part a?
    1. In September 1992, Dow Chemical reacted to the currency chaos in Europe by switching to Euro pricing for all its products in Europe. The purpose, said a Dow executive, was to shift currency risk from Dow to its European customers. Moreover, said the Dow executive, the policy was fairer: By setting the same DM price throughout Europe, Dow’s new policy would nullify any advantage that a Dow customer in one company might have over competitors in another country based on currency swings.
      • What is Dow really trying to accomplish with its new pricing policy?
      • What is the likelihood that this new policy will reduce Dow’s currency risk?
      • How are Dow’s customers likely to respond to this new policy?
    1. Cost Plus Imports is a West Coast chain specializing in low‑cost imported goods, principally from Japan. It has to put out its semiannual catalogue with prices that are good for six months. Advise Cost Plus Imports on how it can protect itself against currency risk.
    2. Lyle Shipping, a British company, has chartered out ships at fixed‑U.S.‑dollar freight rates. How can Lyle use financing to hedge against its exposure? How will your recommendation affect Lyle’s translation exposure? Lyle uses the current rate method to translate foreign currency assets and liabilities. However, the charters are off‑balance‑sheet items.
    3. In 1985, Japan Airlines (JAL) bought $3 billion of foreign exchange contracts at ¥180/$1 over 11 years to hedge its purchases of U.S. aircraft. By 1994, with the yen at about ¥100/$1, JAL had incurred more than $1 billion in cumulative foreign exchange losses on that deal.
      • What was the economic rationale behind JAL’s hedges?
      • Did JAL’s forward contracts constitute an economic hedge? That is, is it likely that JAL’s losses on its forward contracts were offset by currency gains on its operations?
    4. In 1990, a Japanese investor paid $100 million for an office building in downtown Los Angeles. At the time, the exchange rate was ¥145/$1. When the investor went to sell the building five years later, in early 1995, the exchange rate was ¥85/$1 and the building’s value had collapsed to $50 million.
      • What exchange risk did the Japanese investor face at the time of his purchase?
      • How could the investor have hedged his risk?
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  • Small Business Dilemma Book Answers

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    Question 1

    Small Business Dilemma

    Long-Term Financing Decision by the Sports Exports Company

    The Sports Exports Company continues to focus on producing footballs in the U.S. and exporting them to the United Kingdom. The exports are denominated in pounds, which has continually exposed the firm to exchange rate risk. It is now considering a new form of expansion where it would sell specialty sporting goods in the U.S. If it pursues this U.S. project, it would need to borrow long-term funds. The dollar-denominated debt has an interest rate that is slightly lower than the pound- denominated debt.

    1. Jim Logan, owner of the Sports Exports Company, needs to determine whether dollar- denominated debt or pound-denominated debt would be most appropriate for financing this expansion, if he does expand. He is leaning toward financing the U.S. project with dollar- denominated debt, since his goal is to avoid exchange rate risk. Is there any reason why he should consider using pound-denominated debt to reduce exchange rate risk?
    2. Assume that Jim decides to finance his proposed U.S. business with dollar-denominated debt if he does implement the U.S. business idea. How could he use a currency swap along with the debt to reduce the firm’s exposure to exchange rate risk?

    Question 2

    1. Capital Budgeting Analysis.
      Zistine Co. considers a one-year project in New Zealand so that it can capitalize on its technology. It is risk-averse, but is attracted to the project because of a government guarantee. The project will generate a guaranteed NZ$8 million in revenue, paid by the New Zealand government at the end of the year. The payment by the New Zealand government is also guaranteed by a credible U.S. bank. The cash flows earned on the project will be converted to U.S. dollars and remitted to the parent in one year. The prevailing nominal one- year interest rate in New Zealand is 5% while the nominal one-year interest rate in the U.S. is 9%. Zistine’s chief executive officer believes that the movement in the New Zealand dollar is highly uncertain over the next year, but his best guess is that the change in its value will be in accordance with the international Fisher effect. He also believes that interest rate parity holds. He provides this information to three recent finance graduates that he just hired as managers and asks them for their input.

      1. The first manager states that due to the parity conditions, the feasibility of the project will be the same whether the cash flows are hedged with a forward contract or are not hedged. Is this manager correct? Explain.
      2. The second manager states that the project should not be hedged. Based on the interest rates, the IFE suggests that Zistine Co. will benefit from the future exchange rate movements, so the project will generate a higher NPV if Zistine does not hedge. Is this manager correct? Explain.
      3. The third manager states that the project should be hedged because the forward rate contains a premium, and therefore the forward rate will generate more U.S. dollar cash flows than the expected amount of dollar cash flows if the firm remains unhedged. Is this manager correct? Explain.
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  • Black Men and Public Space

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    Black Men and Public Space

    You will select one of the following from the list below and research the issue it raises. You will do two things:

    1) You will summarize the article in such way as to make clear that you understand the author’s argument, and
    2) You will craft a response to the author’s argument. Whether you agree, disagree,  or fall somewhere in between, you will explore and explain your point of  view. You will need to include at least three outside sources to support your claims.

    3 Pages

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  • MB0041 FINANCIAL AND MANAGEMENT ACCOUNTING SEMESTER 1

    $17.50

    Question No 1.

    Analyze the following transaction under traditional approach.

    18.1.2011 Received a cheque from a customer, Sanjay at 5 p.m. Rs.20,000

    19.1.2011 Paid Ramu by cheque Rs.1,50,000

    20.1.2011 Paid salary Rs. 30,000

    20.1.2011 Paid rent by cheque Rs. 8,000

    21.1.2011 Goods withdrawn for personal use Rs. 5,000

    25.1.2011 Paid an advance to suppliers of goods Rs. 1,00,000

    26.1.2011 Received an advance from customers Rs. 3,00,000

    31.1.2011 Paid interest on loan Rs. 5,000

    31.1.2011 Paid instalment of loan Rs. 25,000

    31.1.2011 Interest allowed by bank Rs. 8,000

    Question No 2.

    The trial balance of Nilgiris Co Ltd., as taken on 31st December, 2002 did not tally and the difference was carried to suspense account. The following errors were detected subsequently.

    1. a) Sales book total for November was under cast by Rs. 1200.
    2. b) Purchase of new equipment costing Rs. 9475 has been posted to Purchases a/c.
    3. c) Discount received Rs.1250 and discount allowed Rs. 850 in September 2002 have been posted to wrong sides of discount account.
    4. d) A cheque received from Mr. Longford for Rs. 1500 for goods sold to him on credit earlier, though entered correctly in the cash book has been posted in his account as Rs. 1050.
    5. e) Stocks worth Rs. 255 taken for use by Mr. Dayananda, the Managing Director, have been entered in sales day book.
    6. f) While carrying forward, the total in Returns Inwards Book has been taken as Rs. 674 instead of Rs. 647.
    7. g) An amount paid to cashier, Mr. Ramachandra, Rs. 775 as salary for the month of November has been debited to his personal account as Rs. 757.

    Pass journal entries and draw up the suspense account

    Question No 3.

    From the given trial balance draft an Adjusted Trial Balance.

    Question No 4.

    Compute trend ratios and comment on the financial performance of Infosys Technologies Ltd. from the following extract of its income statements of five years.

    Question No 5.

    Give the meaning of cash flow analysis and put down the objectives of cash flow analysis. Explain the preparation of cash flow statement.

    Question No 6.

    Write the assumptions of marginal costing. Differentiate between absorption costing and marginal costing.

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  • MB0039 –Business Communication Semester 1

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    Question no 1.

    What are the various types of communication? Describe the classification of non-verbal communication.

    Question no. 2

    Describe any situation in your own experience where the communication failed because the listening was faulty. Identify the barrier to listening in this situation.

    Question no 3.

     Describe any 5 types of presentations with examples and their target audience.

    Question no 4.

    Explain the different types of meetings.

    Question no 5.

    You are going to face a job interview for the post of Manager-operations. Which aspects you will keep in mind while facing the interview?

    Question no 6.

    Write short notes on:

    1. a) Internet
    2. b) Intranet
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  • MB0043 –Human Resource Management Semester 1

    $17.50

    Question No.1.

    What do you mean by Human Resource Management? Describe the functions of Human Resource Management.

    Question no. 2

    Discuss the elements of a Career Planning Programme. Explain some of the benefits of a Career Planning program to an organization.

    Question No 3.

    What do you mean by HRIS? Explain the components of HRIS. Describe the different applications of HRIS in Human Resource Management.

    Question No 4.

    Discuss the objectives of Discipline. Explain the Action –penalties of Discipline.

    Question No 5.

    Suppose you have joined as an HR and you have been assigned a task to carry out the grievance handling procedure in your organization. What according to you are the causes of Grievance? Describe in detail the Grievance handling procedure.

    Question No 6.

    Write a short note on the following:

    1. A) Index /Trend Analysis
    2. B) Delphi Technique
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  • MB0038 – Management Process and Organization Behavior Semester 1

    $15.00

    Question No 1.

    Define the terms ‘strategy’. Explain the following:

    1. a) Corporate strategy
    2. b) Business strategy
    3. c) Functional strategy

    Question No 2.

    Define the term ‘management’. Explain the Behavioral science theory and Systems theory.

    Question No 3.

    Give the definition and importance of planning in an organization and explain the steps in planning.

    Question No 4.

    Define the term Controlling? What are the prerequisites of effective control?

    Question No 5.

    What are ‘attitudes’? Explain the components and functions of attitude.

    Question No 6.

    Define leadership. Write a brief note on ‘Contingency Theories of Leadership’

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  • SOLUTIONS TO MB0040 STATISTICS FOR MANAGEMENT SEMESTER 1

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     SOLUTIONS TO MB0040 STATISTICS FOR MANAGEMENT SEMESTER 1

    Question No 1.

    Statistics plays a vital role in almost every facet of human life. Describe the functions of Statistics. Explain the applications of statistics.

    QUESTION NO 2.

    1. a) Explain the approaches to define probability.
    2. b) State the addition and multiplication rules of probability giving an example of each case.

    Question No 3.

    1. a) The procedure of testing hypothesis requires a researcher to adopt several steps. Describe in brief all such steps.
    2. b) Explain the components of time series.

    Question No 4.

    1. a) What is a Chi-square test? Point out its applications. Under what conditions is this test applicable?
    2. b) Discuss the types of measurement scales with examples.

    Question No 5.

    Business forecasting acquires an important place in every field of the economy. Explain the objectives and theories of Business forecasting.

    Question No 6.

    1. a) What is analysis of variance? What are the assumptions of this technique?
    2. b) Three samples  below  have  been  obtained  from  normal  populations  with  equal variance Test the hypothesis at 5% level that the population means are equal.
    A B C
    8 7      12
    10 5 9
    7 10 13
    14 9 12
    11 9 14

    [The table value of F at 5% level of significance for v1 = 2 and v2 = 12 is 3.88]

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